Sales rising as restrictions are relaxed

On 15 August the Government allowed close-contact beauty treatments to resume, and bowling alleys, skating rinks, soft-play centres and casinos can now reopen.

Indoor theatre and music performances can now also take place, albeit with socially distanced audiences. Looking ahead, plans are being put in place to allow the return of spectators to sporting events, with conference venues also starting trials.

The Government’s Eat Out To Help Out scheme, which was introduced in early August, has helped to drive demand in the hospitality sector. In its first week, the scheme was used more than 10 million times with the average claim around £5. Meanwhile, fines for failing to wear a face covering where mandatory are being increased, with repeat offenders now facing penalties of up to £3,200.

Latest retail statistics 

The UK has officially fallen into recession, with the economy shrinking by more than 20% in the second quarter of 2020 – the biggest contraction on record. The number of hours worked fell by 18.4%, while jobless claims increased to 2.7m in July.

The British Retail Consortium’s July figures showed that UK retail sales were up 4.3% on a like-for-like basis from a year earlier. This excluded temporarily closed stores but included online sales. On a total basis, sales were up 3.2% in July, the second consecutive month of growth since the pandemic started, as lockdown measures were eased.

Over the three months to July, in-store non-food sales were down 29.3% on a total basis and 11.3% like-for-like. In the same period food sales rose 8.2% on a like-for-like basis and 6.1% on total. Online non-food sales increased by 41% in July, while the non-food online penetration rate increased from 29.7% a year ago to 42%.

Looking at categories, furniture, computing and home accessories performed best as consumers continued to focus on domestic improvements. 

Food sales growth has remained strong, only down marginally on the previous month despite the reopening of pubs, bars and restaurants.

Santander support in the UK

This is a crisis in which brands will be remembered for how they act. For our part, we’re continuing to look at how to serve clients better. We have a number of initiatives to support retail and wholesale clients (in addition to our Trade Club & Wholesale & Retail International connectivity proposition).

• Supply chain diversification and finance solutions – in recent webinars we’ve addressed this topic for homewares and fashion brands, as well as for food and drink retailers and wholesalers. In the case of the latter, we recently held a webinar showcasing what South Africa may be able to offer in this regard. It’s a country that exports 90% of its fresh fruit and offers counter-cyclical harvesting seasons to Europe. We have an ecosystem of partners in South Africa that can support UK businesses. We also have a supplier finance solution that can strengthen supplier relationships. You can find detailed insights and the webinar recording here.   
• Santander Retailer Offers – we’re working on a project to make it possible for brands to sell their excess stock online through our Retailer Offers programme, which enables around 2.7 million Santander personal customers to earn cashback when shopping at selected merchants. More details here.
• Liquidity management – for businesses selling essential goods and experienced increased demand, we’re offering targeted support for short- and medium-term liquidity management to make sure they can optimise returns on surplus funds. More details here.

To discuss how Santander can help your business please contact Sukh Nat, Head of Wholesale & Retail on sukhjeeven.nat@santander.co.uk